New Oppression Remedy in Condos – what does it mean?

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The recent proclamation of amendments to the Condominium Property Act, 1993 has created a new remedy for individuals and entities who interact with condominium corporations.  Section 99.2 of the Act states as follows:

99.2(1) An owner, a corporation, a developer, a tenant, a mortgagee of a unit or other interested person may apply to the court for an order if the applicant alleges that the conduct of an owner, a tenant, a corporation, a developer or a mortgagee of a unit is or threatens to be oppressive or unfairly prejudicial to the applicant or unfairly disregards the interests of the applicant.
(2) On an application pursuant to subsection (1), if the judge determines that the conduct of an owner, a tenant, a corporation, a developer or a mortgagee of a unit is or threatens to be oppressive or unfairly prejudicial to the applicant or unfairly disregards the interests of the applicant, the judge may make any order the judge considers appropriate, including:
(a) an order prohibiting the conduct alleged in the application; and
(b) an order requiring the payment of compensation.

Not surprisingly, there has not been a reported decision on this section of the legislation.  It’s expected that its interpretation would at least be informed by some of the more comparable legislation across Canada.  These decisions can provide some insight on the types of disputes that we may encounter.
Oppressive?  Maybe oppressively ADORABLE!
Take, for example, the parking dispute between a unit owner and the condominium corporation in Grigoriu v. Ottawa-Carleton Standard Condominium Corporation No. 706, 2014 ONSC 2885 (CanLII), <http://canlii.ca/t/g6snx>.  A unit owner in an adjoining property purchased a parking spot and storage space in the Respondent condominium.  They used it, without issue, for a number of years.
Due to some damage and break-ins, the owners of the condominium corporation were concerned with the security of the building.  They were worried that non-resident users of the parkade would harm their security.  In order to protect themselves, they amended the declaration (essentially the constitution of their condo – no comparable document in Saskatchewan) to indicate that non residents could not be transferred parking or storage units.  At this time the Applicant was the only non owner that owned these parking spots.  They obtained 80% of the owners’ signatures to make that change.

The effect was to cause the condo unit owned by the applicants to be unsellable.  They tried listing the property without parking, and no one wanted it.  They listed it with parking but the Applicants always needed to add a condition that it was subject to an amendment to the declaration, and no one was willing to wait for the change.  

The Applicant brought an application in oppression to require the condominium to revise the declaration to allow them to transfer the parking units to the eventual new owner of their condo.

The judge noted that the test applicable to applications for oppression is the same as those in an ordinary corporate context.   The judge notes that “conduct that is “burdensome, harsh and wrongful”, “a visible departure from standards of fair dealing” and an “abuse of power”. To be oppressive, the conduct of the Board of the Corporation must both (a) undermine the reasonable expectations of the parties and (b) be coercive, abusive, or unfairly disregard the interests of the applicants.”

The court found that by effectively targeting only the Applicants through this amendment that the board and the Defendant were being oppressive.  The court ordered that an amended declaration be used to allow future purchasers to use the parking at the Defendant condo.

Despite a clear democratic choice of the owners, the court changed a fundamental document of the corporation.  In my view – while the Corporation had a decent reason for wanting the change, there was no clear linkage between the change and the desired outcome, especially as weighed against the harm to the individual owner.
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